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tv   Mad Money  CNBC  September 20, 2016 6:00pm-7:01pm EDT

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>> he's more handsome. >> happy birthday, buddy. >> i'm melissa lee, thanks so much. dan is sending him a trampoline. . . my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always work and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends, i just want to make you some money. so call me. or tweet me. @jimcramer. it is maddeningly inconsistent out there. we have good days, paul, but bad days. stocks up on individual
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performance then down aggregate news. other stocks rally on good event but then those gains are not sustainable. which makes it plain treacherous out there. everyday. even a seemingly benign one like today. let me give you some concrete examples so you know exactly what i'm talking about. last thursday night, twitter broadcast an incredibly exciting contest between the new york jets and buffalo bills. and the followers of the stock were bursting with glee. if you went to my mentions column i was bombarded with people who simile could not stop telling me this is the biggest event since the super bowl. they thought the stock would open $3, $4 higher. there were people saying that my tempered enthusiasm was misplaced to use a euphemism no are what they thought. even though i enjoyed it and the twitter is now to the moon alice, sure enough. jumping to more than $19.
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but then we got the numbers for will actual show the other day and they are down right puny. apples to apples basis, 230,000 em watched on twitter. it was in a word disappointing. and even though the die hards don't want it hear it, the stock was immediately hammered to pretty much where it was before the game. it was exciting. turned out not to be the needle-mover that so many expected. i continue to think that twitter is an underval i'd asset versus what it could be worth. but it is overvalued on its current earnings configuration. how about home depot? if you ask me which company had the biggest quarter of all big boxes, that would be home depot. long-term forecast runway positive data elevated earnings. but we have within hearing anecdotally about a slow down earning.
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for the month of august, they were punk. that was after home depot reported they were down .3% from the previous month. shattering. then today a decline in the housing starts of fairly long proportion. that took me by surprise. the result, best performing retailer by the numbers is one of the worst performing by the stock. having fallen from 138 to 126. we can only imagine how bad it would be if home depot reported weaker results. how about the inconsistencies with the groups that drive you crazy. you mostly correlate by sector. i would say the two best home builders are lenar and home brothers. there are gross margins improving sales. he raised his forecast right on the air here. but today lenar reported an ever so gross report. lennar stock is punished. yes.
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dropping 3%. actually closed kb homes and not as good home builder reports an outstanding number. remember i told you i like their california business and the stock is rallying 5% in after hours. how about another one? last friday straight shooting talker greg heys, ceo of united technology spoke. reiterating guidance at the same time talking about production problems and make the new geared turbo fan fuel efficient aircraft engine. there are still glitches. something in this that is so complex to build. he was none to happy and he made this point several times. customers are angry because they are clamoring for the product. i totally got the frustration of the new engines. but you know what? it didn't matter. they decide to dump the stock, falling about two bucks. it wasn't the supply of engines and they hard to make, that wasn't it, no, no. had to be a slackening of demand.
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story the got totally distorted. it was incredibly inconsistent compared to what was actually said. the main fedex quarter tonight, i don't know about you, i feel better. not worse. about the united technology forecast. all right, elf in the room. wells fargo, here is the company that had some of the worst publicity imaginable about cross-selling misdeeds, amazing. ceo was brought to the senate for questioning. it was a weird hearing. but anger at stumpf brought condemnation. some crossed aisles against stumph. now come on, man. we know you expected that but no, wells fargo had its biggest day in ages. i think short sellers felt like they today bring in their bets because of the possibility after surprise rate hike at tomorrow's
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fed meeting. whatever the negative publicity fall out, wells fargo is supposed to be the top beneficiaries of a rate hike. i suspect the stock will go back down though. or consider the bizarre disconnect between what analysts are saying about apple sales and what the sellers are saying. this morning we were treated to what i regard as an extremely negative no from jaffrey piper about how the new iphone may not have the leg answers the demand is petering out much faster than usual. but then david interviewed sprint ceo. he is a true mcgwiguerrilla fig. we asked him about the note. he point blank dismissed it it is not a question of who you want to believe. it is more after serial commentary. he boosts the right back up with his comment. hence the gyrations with. ael stock and hence how hard it
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is to have comments about anything. yesterday looking like it was rolling over but tonight adobe, total cramer favorite, suggested and microsoft out of nowhere announcing a $40 million buy back and suddenly tech is looking good. how about this. allergen, paying. are you ready? more than 700% premium, took therapeutics, might have, might, might, might have a drug for liver disease and even though as recently as two months ago we learned this drug failed its primary end point, what heck. we have to find out more. but put out a big note today with jack moore, strategist, but still, 700%? i find that inconsistent. or one more. urban outfitters say good things about how fashion is back for women even in the mall and that they are spending again.
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consumer wants to buy she is purchasing. but then last night saying most women cut back buying. even though they think they have the right fashion at dress barn, justice, maurice, ann taylor. perhaps because of weakness in the oil price. sounds like a stretch to me. what is it? i think urban has it right with stock over 56% of the year. it dropped nearly 30% in one session. here is the bottom line. basically this way all year. big runs in stocks only to see them repeal on absolutely nothing but a note about the back roll. government division or report from another company in sector that isn't doing that well. quickly, finding the last positive data point. the kind of thing that inspires zaero confidence and it keeps so many investors on the sideline or streaming into the exits well before the game ends. all can i say is what a revolting development.
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liena in florida, lena? >> calle >> caller: boo-yah, jim. >> boo-yah. >>. >> caller: i own proctor and gamble stock and received an ever to exchange kng shares for cody. >> right. >> caller: i would appreciate -- >> just sell it. proctor and gamble went up to 89. but we think that proctor is going to be a better long time buy with that yield that you want. let's go to ruth if washington. ruth? ruth? >> oh, okay. take another call. how about bruce in illinois? >> caller: hi, jim. good to be with you. i was looking to get in on a
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timeframe for sales force crm. bought in at $79.95, last shares right before earning. >> right. >> caller: the market punished it sort of even though it beat on the top and bottom line and roughly 10% down, not today at 72. i worked in data mining and software companies so third and fourth quarters are generally good for those -- >> yes, they are. big budget flush. >> caller: do you see any reason why the company won't execute -- >> this is a complicated quarter for sales force. i know they didn't feel they executed as well as they would like. but dream force is coming up. that's usually more action. don't forget, einstein knew artificial intelligence. i think the company stock is a buy. and i tell you, strong numbers from adobe this evening cause me to think better about sales force.
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a maddening market out there. that's why i need you more focused than ever. tonight i need to you focus on stories that can cut through the noise. tonight, etsy crafted a rally. sales up year to date. tonight, i'm talking with one of the companies top execs to see if the on-line goods and emporium can continue heading higher. and general motors may not grow for years and believe it or not that's the good news. i'll explain why and what it means for other stocks affected. and financial technologies reef lugsized how investors drop coin. is that smart? i'll tell if you there is still bargains to be had when we analyze the group and go off the charts. so stick with cramer. >> don't miss a second of "mad money." follow @jimcramer on twitter. #madtweets. send jim an e-mail to cnbc.com
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like i told you last night, there is one thing to keep you working and that's growth, pure growth. the thing about growth stocks is that they can come in all shapes and sizes. take etsy, on-line marketplace for handmade goods. after spending near lay year getting hammered in the wake of the ipo, it was skeptical, but then the company dramatically improved the user intraface. terrific technology and fundamentals started to improve immediately. hence why i recommended this stock four months ago. etsy rallied more than 50% with the gain coming after a blowout quarter. the company has become the number one place it buy hand
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crafts on-line and from this year 2018 forecasting the revenue the increase at 20 to 25% compound at growth rate and merchandising volume rises from 13 to 17% annually. on top of their organic growth, they bought a company called black bird technologies. they deliver superior search relevance and recommendations for undisclosed sum. black bird gives them an artificial intelligence platform. to help etsy do a better job of directing their customers to products they like to buy. this is so essential. especially going toe to toe with amazon. take a closer look at christina, etsy's chief officer and a member of the global cfo council. get a better sense of what is happening with her company. welcome to "mad money." good to see you. thank you for coming. >> thanks for having me, jim. >> this acquisition. when we hear about machine
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learning and artificial intelligence, you think amazon has that and they are killing everybody. what will this do it make it as it is, etsy is killing amazon. what does this mean to be competitive. >> etsy leverages technology to connect people through commerce. we are tech innovators. this is a great example. what we can do with this technology that others can't. we're so excited to have this black bird team on board. we have deep skills learning because it is really hard to connect 40 millionite tomorrow's 26 million buyers around the globe. but this augments our skill set and accelerates our progress and search and we think it'll drive future growth. we're so excited to have this. >> you have a special machine when it comes to international and translation. is this going to be, my wife beads all the time because she makes jewelry so she goes to etsy constantly. if you like beads you might like something? >> this technology has multiple application from just spelling
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suggestions to recommendation engines. it will really help us turn the fly wheel on search. we're already leaders in unstructured data because all of our 40 million items for sale are unique. they are not commodity goods. not found anywhere else. this will just help us really accelerate search. >> there are periods when someone will say amazon will do a home crafts or alibaba. how have the competitors done who have tried to be in your space? >> we've been in business for 11 years and we have seen competitors come and go. when we look at the competitive landscape we think we are differentiated to help these creative entrepreneurs. we have 1.6 million in 200 countries. they have a distinct set of needs we feel with our technology we can leverage it more than anything. >> talk about this. my daughter was on your platform and you guys not only do not abuse sellers as some companies do. but you absolutely try to promote their businesses both on
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and off-line. >> yes. i think is another example of what we can do with our technology. we talk to our sellers all the time and build seller services to help them grow and scale their businesses. we directly target their pain points. >> their pain points? >> their pain points. they tell us where they need help. whether it is marketing, inventory management, shipping, payment. we launched our service five years ago and that is 50% of revenue. yes, etsy is e-commerce but it is so much more. we have new service answers growing the ones we have. >> you are growing the app and the app is where the business is done. you have to stay within the app. how much of your business is done on hand-held? >> at this point, 60% of our visits and nearly 50% of our gross merchandise sales is through mobile. we are really proud of what we have done in mobile the last two years we've been laser focused on it. we think there is so much more to do. again this acquisition will help us on things like mobile search for example. we think there is such a
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pipeline that we can innovate around with our products like mobile app. but also growing in mobile web, mobile app and desktop which we are proud of. quite differentiated. >> now, i know you -- i do a lot of stuff in brooklyn, seeing you guys all the time and you're a huge employer in brooklyn. can you get the talent in this area that you need to be able to be a good presence on-line? >> absolutely. when we think of etsy as a company, it attracts employ eens when you think about engineer being with engineering is not just silicon valley and engineers come to us and come because we are such tech innovators. we are known for that and they love the hard problem of 40 million unstructured items connecting with 26 million buyers and 200 countries. that's so exciting and challenging. such a great opportunity for smart engineers. >> in one of the panels i led where your ceo is there, openly
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talked about the notion, you're an advocate for small business and that that is really integral to what you believe in. >> as you know, small business drives economy and we're passionate about the creative entrepreneurs. we have a seller-aligned business model. all of our business decisions are around. how can we help them succeed? makes it really easy to make business decisions when you're focused on your customer. >> one of the things that would distinguish from amazon, you have craft fairs, you're perfectly willing to introduce your sellers into the world of say, macy's. >> oh, yes. when we think about the long-term we want to help our sellers sell wherever she is. there's a great opportunity, not only with etsy-owned markets like etsy.com like pattern like our wholesalers but to take all of our seller services off of etsy over the long-term. a great opportunity. >> it's been great, money is made, you far exceeded guidance
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and people love your site. both buyers and sellers. that's kristina salin, etsy cfo. just a terrific story. stick with cramer. >> coming up, the stock of tech data corporations soared on monday. >> this was a monster deal. why is it even perceived as being perfect? >> does this company have more room to run? cramer sits down with the ceo. when "mad money" returns.
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with dand bold styling to to stay ahead of the curve... the lexus rx, rx hybrid and rx f sport. this is the rx, elevated. this is the pursuit of perfection. i was amazed yesterday when i saw morgan stanley upgraded general motors. adam jones had hated for years. i mean, it was certainly a
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begrudging upgrade. it was brilliant in simplicity. sure, if general motors can report flat earnings for a couple of years, they think it is a huge win. when i check wall street's consensus estimates, sure enough for gm, 585 this year, 585 next year and 557 in 2018. holy cow it would be fabulous if it can generate flat numbers for the next two years versus consens consensus. no wonder this information caused gm to spike. one of yesterday's biggest gainers. and it kept it today. and why are flat earnings so important? okay, average stock sells for roughly 18 times more but general motors sells for six times earnings because it is expected to have two down years in a row. money managers will not pay up under any circumstances with declining numbers year over year. gm has the same problem as ford. same as delta, united, continental. and analysts believe the future
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will be much worse than the present. that's a pretty darn exclusive club. even if it isn't one you want it join. and low valuation cease statement. there is no particular reason why the aught yoes and airlines need to have two years going forward that are down. the companies certainly aren't thinking like that. these companies are concerned about the near term absolutely. they are worried. but the very bullish about the long-term prospects. the analysts on the other hand are a lot more skeptical. so i got to ask you, who will be right? honestly, i find it hard to believe that they are facing not one but two down years in a row. i think many of the problems have to do with the addition of new capacity as companies try to take advantage of higher fares. even after all of the c consolidation in the industry. they gauge in price wars all over the country. they simply couldn't resist. at the same time, foreign travel is increasingly difficult. the dollar put a crimp on
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tourism. a fear of terrorism. then the economic decline in latin-america which hurt traffic for the airlines too. let's not forget the zika drop-off. that's a lot of head winds that are expected to stay head winds. i just don't believe that it can last for two whole years. the airlines can turn things around by pulling their competitive roots so margins can expand again. and the key metric can go higher. then the companies can take all their cash and use it to aggressively buy back stock and they have a lot of cash now assuring that the additional profit expands. i think that's doable. how about autos? tougher situation. let's forget ford. let's focus on general motors. these companies face real long-term head wind. driverless cars. uber. younger people no longer getting cars or even driver's licenses. these seems to be worldwide concerns and gm is a worldwide company. short term though, i think there is a reason for optimism here. u.s. is strong. could stay strong with low
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unemployment rate and low gasoline prices. i think that europe with 770 million people isn't going to put up negative numbers this year. not with incredibly low interest rates and a central bank that won't stop until things pick up. immigration explosion could cause even the tight fist of german government to spend money. i think betting against europe for the next two years is just ill advised. i bet it surprises in its strength. latin-america top brazil could go way by way of argentina. mexico, peso could be troughing. finally, china. and this is the real source of my optimism. general motor is doing very well in china. last year sold 3 million cars in the u.s. and 3.6 million cars china. did you know they sold more cars in china than the u.s.? august was up 18%. gm like the airlines needs to take that cash, buy back as many shares as it can and help boost earnings. can this financial engineering
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count? let at the games in the package stocks with no real organic growth whatsoever but lots of earnings per share growth generated via buy backs. investors will pay for better numbers period. that's why i believe morgan stanley will be right on general motors and why i think most airlines are buys here, not sells. i know the numbers are all awe inspiring. i just don't want to rule out the idea that the future might actually be better than the past. go to rick in california. rick? >> caller: jim, boo-yah. >> boo-yah, rick. >> caller: it's my birthday and i'm having an incredible day because i'm talking to you. >> happy birthday to you. glad to have you on the show. >> caller: what do you make about the ipo several years guy and has done what with it and what is your take on it. >> well, i don't particularly like the group unless they are selling at five to six times
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earnings. this one is at nine times but falling more than 20% for the year so i would not advocate selling it. i just would not buy the stock. let's good to gordon in my home state of new jersey. gordon? >> caller: boo-yah, mr. cramer. >> boo-yah. >> >> caller: how are you? >> good. how are you? >> caller: good. congratulations on the fantastic job you do educating the investing public. i'm a minister and we have an investment club at our church. and listening to you is one of the keys to life. >> thank you. >> caller: thank you for the fan fastic job. >> minister, thank you so much. wow! i mean, we do it. we do it for a reason. we've been doing it forever. you're listening. thank you for those comments. it inspires us too. how can i help? >> caller: yes. i like your comments on the stock symbol al, they purchase
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and lease commercial jet airlines in asia, pacific rim latin-america as well as other countries. they announced today that the airlines is committed to leasing at least six of their new airbus. i would like to know your opinion on this company. do you see it as a buy? and also, is the world economy in a good enough place that a company like this can do well and grow? >> thank you for the comment. i'm still glowing. we heard from honeywell and from boeing. looks like air travel is over ten-year period will continue to advance. that's how we will look at it which is why i like your stock. not short term. short term is very, very rocky. long-term travel is in great shape and i think that air lease will participate in that. there is tremendous long-term deplanned for airlines.
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i get it be a all-out slug fest at the airport terminal and everyone riding around in uber real soon. but the future for the airlines and aught yoes may not be as bad as expected. that may be just enough to get their spots moving. that's what we wanton "mad money." now i'm going off the charts with some of the major names in the payment spacees. see if you can cash in on that sector. shares of tech data rocking over 20% yesterday. i've got the exclusive with the ceo at the most recent acquisition and it's a big one. of course, rapid fire in tonight's edition of the lightning round. stick with cramer.
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when the eve of tomorrow's big bad fed meeting, i want to circle back to an idea i started talking about last night. at a moment like this you need to be searching for stocks that are worth buying regardless of what happens tomorrow. what is working even as the market has gotten choppy over the last couple of weeks. i say the nonbank financials. especially the payment place. they have been holding it well. that's why tonight we are going off the charts with the help of bob lang, the founder of explosive options.net as well as
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technical star in the three-man team behind the trifecta stocks newslett newsletter. we got to get a better sense of what is happening with the credit card stocks and payment place surviving or even thriving in what's pretty much a volatile market. and i'm speaking here about visa, master card and pay back. lang says charts are looking up for restocks and you can understand why, if you know a little bit about the mechanics of money management. there are many managers who like to mirror the composition of the s&p 500. if some sktor rockets higher out of wherever we won't perform too badly. they witness incredibly intense question of john stump in the wake of the wells fargo, but there are all these hedge funds and mutual funds that still need financial exposure because the financials are the secretariest largest in s&p 500. what do they do unless the federal reserve decides it surprise us with a rate hike tomorrow they will keep piling
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into the nonbank financials like payment processors because thee companies don't need higher rates to make good money and that's why i think visa, master card, and paypal, which wined of really are tech companies, in the financial arena, are focussing on here, plus the fundamentals are just plane good. what does bob waning like about these? let's start with visa. lang says visa lhas been consolidating gains. decline represents normal pull-back activity which is why the stock started bouncing back. when visa got hit along with the rest of the market it found a nice floor of support at short term 20-day moving average. about a buck below is where the stock is currently trading.
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that's good floor to have. lang says visa seems to be making a run back towards the highs. visa's expand this month is stock rally and volumes like a lie detector when it comes to reading charts. if a stock rallies on strong vibe like visa, see the button, that means it moves as it is generally a sign that big institution money managers are in there picking up the stock and when the big boys buy something, ptheir purchases are so big sometimes they push the stock up. you see foot steps by looking at the chart. next up, let's look at the chart of master card symbol ma. this stock add nice bullish pattern and like most things it is called a pen yum because it looks like a a penam.yum becaus looks like a a penam. it looks like a pennant hanging off that pole. that's what we've got there. why does the imagery picture matter so much?
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because this bullish pennant formation is known as a continuation pattern. when you see action like this it means the stock is resting before it resumes to march higher. breaking out at high end of the pennant today means it could be ready to run soon. lang points out when the market was getting slammed last week master card found a really nice floor. again, moving the average floor, currently around 98 bucks. down from where the stock is currently trading. plus the recent rally over the past month happened on high volume. okay. which tells lang the institutional money managers are loading up on master card and when you look at the money flow, that's an oscillator which levels the buying and selling pressure. it goes strong since early august. another sign of institutional buying. that's why master card is lang's favorite chart in the group and part of the reason why this stock is in this street's trifecta stocks portfolio that he does. so this one is his favorite. finally, how about paypal? and this is just an okay
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performer, frankly. this is the on-line payment stock we own and can you follow along. here is paypal. when he says he has a lot going for it, first paypal made an inverse head and shoulders pattern, one of the most reliable bullish formations in the book and it sounds like an upside down bottle of shampoo. there we go. i know some people say to me, jim, isn't that head and shoulders bad but bob is looking that the from this point of view and saying you can see that this is a real inverse head and shoulders and you have one big decline sandwiched between two smaller declines which looks like the head and shoulders after person hanging upside down. but thing about this pattern is it often moves higher. and paypal could easily go to 42 bucks now that it broke above the pattern's neck line and that's what typically has it happen and broke above the neck line there. that's where the stock is if paypal follows bob lang's
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advice. i think higher. the vergens to vergens, the mac d, a tool that helps predict changes in stock trajectory, made a bullish crossover. there's the bullish crossover. you see this here. that's where the black line goes above the red line, very bullish. and another signal suggesting paypal goes higher, chicken money flow. here we good. this is pretty positive territory for months. and perhaps most important, lang likes the paypal actually manage to hold its own and when the market is getting crushed over the past couple of weeks. one of the few great performers during the period and paypal could exceed march highs of $41.75, over 2 bucks from where it is now and this stock is off to the races. so here is the bottom line here in these payment processors. as interpreted by bob lang, indicating big boys are loading up like visa, master card, payp paypal. he thinks all three could head
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higher. he particularly likes master card. me, i like all three. i would buy any one of these on fed-induced weakness if the fed does indeed give us a statement that's too hawkish tomorrow. "mad money" is back after the break. audi pilotless vehicles have conquered highways, mountains, and racetracks. and now much of that same advanced technology is found in the audi a4. with one notable difference... ♪ the highly advanced audi a4, with available traffic jam assist. ♪
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it is time for lightning round. and then the lightning round is over. are you ready? time for the linening round. starting with john in illinois. john? >> caller: hi, jim. hey, would you buy, sell or hold cummings? >> i would buy cummings for the long-term. i think chienal be fine and it is a bit of a china play. david in virginia. >> caller: thanks for taking my call, jim. should i buy, hold or sell chesapeake energy. >> chesapeake is not one of my
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favorite. lpc is what we are talking about now. jeff in new jersey. >> caller: hey, jim, how are you doing? >> good. how are you? >> caller: fine. last week intel announced pc wlaen do you think about micron? >> i think micron is good. i like micron. i still live nvidia. how about tim in washington? tim? >> caller: hi. how are you doing. thank you for taking my call. >> of course. >> caller: my daughter sophia wants to say hi to you. >> hi, jim cramer. >> oh, hi. >> caller: i have a question about high solution -- >> scour solutions? scour solutions is 7 bucks i think. as much as 7 bucks intellectual party in apple iphone 7. i remain steadfast that this is a good stock. to ron in new jersey.
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ron? >> caller: jim, boo-yah from new jersey. >> nice. i was in ocean groves last weekend. chats shaking? >> caller: the prospect of the new alcoa and -- >> i like the split very much. the vin investment guy with me. and i wanted to double down on it to tell you honestly. double down. why? because i truly believe that aircraft demand is strong. and this looks like precision cast parts to me. i'm going to mark in texas. mark? >> caller: [ inaudible ] >> kroger? i think kroger is overly punished. i have been down, down, down. i'm willing to say you should stop selling kroger. it is too low to sell. go to nick in new york. nick? >> caller: jimmy, boo-yah, how you doing? >> boo-yah, what's shaking?
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>> caller: nothing much. cliff natural resources -- >> no, no. that is at a stay. i don't like what they make. end that. the that's the end of the lightning round. >> the lightning round is sponsored by td ameritrade. tomorrow, kick off the trading day with squawk on the street. live from post the at nyse. >> no, i did. >> okay. >> i had something in my ear. >> now our executive producer confirmed -- >> well he is an eagle is fan, flying high and he can tell us what he wants. >> all starts at t9:00 a.m. eastern. but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my brain before you told my face.
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[ clock titime. ] you only have so much. that's why we wanna make sure you won't have to wait on hold. and you won't have to guess when we'll turn up. because after all... we should fit into your life. [ laughing ] not the other way around. [ clock ticking ]
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boy did we get big news out of tech dataa. basically tech dwrat helps apple, cisco, hp. and many others. yesterday we found out this company is expanding its reach. tech data announced it is acquiring competitor app net for $2.6 billion. data shot up more than 20% on the news. i knew it woo be up but not this much. typically you don't see a rally like that unless the market endures the deal.
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there is a lot to like with the trance iks. more exposure to the data sent earn the vast asia pacific market. some day could be a big positive. especially since the company's most report a few weeks ago wasn't perfect. so just how bullish is this acquisition for tech data? could this deal be what the stock is or did yesterday's monster 22% gain already bake in most of the upside. let's check in with bob, ceo of tech data. learn more about how the company is duing and what the ab tech means to the future. welcome back it "mad money." good to see you sir. have a seat. this is a monster deal and we have had ab net on and your company on many times. this division was doing okay for ab net. why is it being perceived as being so perfect for tech data? >> yeah. i think the market and vendors understand how the two pieces fit together. tech data wants to invest in the data center and help customers grow at the higher end of the
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market. the reason that's important is we want it help customers get ready for the third platform. >> which by the way you say third platform drives all new strategic enterprise i.t. investment. >> for the next decade. we needed more skills, more talents, more vendors relationships. to be that offramp into the third platform. we also wanted to balance our business out. we have become european weighted. 60%, 40%. >> yeah. i thought oh, that could be bad for tech data. >> we wanted to find an acquisition to balance us. and we wanted to get into asia pacific. as a distributor, you have to have a presence. you can't just hang out a sign and grow. >> that's only 3%. >> but it's a footprint. >> tell me. >>. >> it will allow us to bring other vepdors that we have relationships into that mark eaten grow. for example a networking vendor that may want to grow if asia pacific that we have a
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relationship with, we can take that product there. that's what we were after and technology solutions checked all three boxes for us. the perfect move. and i think customers and vendors have acknowledged it. >> we have to explain third party platform technology to people. talking about hyper converge insti infrastructure through this. all good through this. >> all good. if you turn back the clock on technology it started with the main frame. that's referred to as first platform. that is the industry standard for 25 years. then this architecture called client server, small computers attached to pcs. that's a second platform. third platform is, is a whole new set of architecture that leads out to cloud, leads you to social, leads you to mobile. and so in order to be there, you have to be big in the data center. and so we wanted to make these investments in the data center to position us to be able to take our customers into that
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third platform. >> i think that's interesting is you are very abject in your call saying we have to get in with the times. you were a little too much notebook and pc. this leapfrogs immediately. >> and we're proud of thatter taj. that broad linter taj of pcs and brinters. but under the cover, we have an $8 billion business center today. and so by when we bring technology solutions in with more vendors and more customers, lots of talented people that understand that business, we balance tech data out between the broad line and new higher end technologies. and by the way, the margins are better up there. >> right. right. >> we can earn a little bit more money because we have more value. we have a lot of experience in that high-end business. that's why when we saw technology solutions, we knew that was the perfect match for us. >> now, i was just confused about how you arrived at the prieps what you say about that price is this is basically
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extremely, one reason why the stock went up, somehow that's good for everybody. not like ab net, i know you didn't want it take advantage because they got stock but the fact is you were able to price this so next year's numbers go up big. >> yeah. we think it is a good deal for them and their shareholders. if you remember, jim, our balance sheet had virtually no debt on it. so with a little debt and leverage, it becomes very attractive to our shareholders. when you can put a little leverage on your balance sheet and find a strategic match like we did, that's where you get the doubling effect. >> and your cash flow is huge. you will be able to pay this down very quickly. >> our goal is to pay it down in the next 18 to 24 months. >> unbelievable. >> still carrying some leverage at end of that but that's healthy leaf wrath fverage of o. >> i have to congratulate you.
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it was so clear this was a great day. i've loved your company for a long time. and even though you're a put down, you never skipped a beat. >> we are excited. we're excited with the talent and skills that come into tech data. a difference maker for us. >> oh sure. i don't think the stock is done go by any means. all sorts of deck answerss and kon /* /- decks and conference calls. stick with cramer. kon /* /- decks and conference calls. stick with cramer. erss and kon /* /- decks and conference calls. stick with cramer. and kon /* /- decks and conference calls. stick with cramer. kon /* /- decks and conference calls. stick with cramer. /* /- decks and conference calls. stick with cramer. decks and conference calls. stick with cramer. decks and conference calls. stick with cramer. ecks and conference calls. stick with cramer. decks and conference calls. stick with cramer. decks and conference calls. stick with cramer. decks and conference calls. stick with crame deckdecks and conference calls.
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[phone buzzing] some things are simply impossible to ignore. the strikingly designed lexus nx turbo and hybrid. the suv that dares to go beyond utility. this is the pursuit of perfection.
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adobe keeps delivering. there's the cloud company that has stood out as doing it exactly right. don't forget fedex. we will have more tomorrow. but what a beautiful quarter. i'm jim cramer and i will see you tomorrow. , and i will see you tomorrow. lemonis: tonight on "the profit"...
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trevor: we're flex watches. we make watches that give back. lemonis: at an l.a. watch business with a powerful mission... travis: each color represented a different charity. lemonis: ...the owners have lost their way, and now they're losing time. how much longer could you keep the business open? travis: another few months. [ sighs ] lemonis: their branding is unfocused. this is a total mess. there's no signage. there's no point-of-purchase material. there's nothing. their process is rushed. feels like a high-school art project. and a painful tragedy has them questioning their purpose. travis: you're allowed to talk about the fact that we did charity and -- trevor: that is not our direction. travis: let's be honest. trevor: stop cutting me off. travis: this is who we are! lemonis: if i can't help these guys return to their roots...

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